Amended  IN  Senate  May 17, 2017
Amended  IN  Senate  May 01, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 100

Introduced by Senator De León

January 11, 2017

An act to amend Sections 25420 and 39730.8 of the Health and Safety Code, to amend Section 40106 of the Public Resources Code, and to amend Sections 399.11, 399.15, and 399.30 of, and to add Sections 454.53 and 740.15 to, the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 100, as amended, De León. Energy policies and programs: California Renewables Portfolio Standard Program: biomethane procurement: reducing biomethane: emissions of greenhouse gases: renewable gas fueled vehicles.
(1) Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities, as defined, are under the direction of their governing boards. The California Renewables Portfolio Standard Program requires the PUC to establish a renewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, so that the total kilowatthours of those products sold to their retail end-use customers achieves 25% of retail sales by December 31, 2016, 33% by December 31, 2020, 40% by December 31, 2024, 45% by December 31, 2027, and 50% by December 31, 2030. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the procurement requirements established by the program. The Legislature has found and declared that its intent in implementing the program is to attain, among other targets for sale of eligible renewable resources, the target of 50% of total retail sales of electricity by December 31, 2030.
This bill would revise the above-described legislative findings and declarations to state that the goal of the program is to achieve that 50% renewable resources target by December 31, 2026, to achieve a 60% eligible renewable resources target by December 31, 2030, and for all electricity sold at retail to be generated by eligible renewable energy resources by December 31, 2045. The bill would require that retail sellers and local publicly owned electric utilities procure a minimum quantity of electricity products from eligible renewable energy resources so that the total kilowatthours of those products sold to their retail end-use customers achieve 45% of retail sales by December 31, 2023, 50% by December 31, 2026, and 60% by December 31, 2030.
(2) Existing law requires the PUC to adopt policies and programs that promote the in-state production and distribution of biomethane, as defined, that facilitate the development of a variety of sources of in-state biomethane.
This bill would authorize the PUC to establish a requirement that gas sellers, as defined, procure a minimum percentage of biomethane or renewable gas, as defined, from sources that reduce emissions of short-lived climate pollutants in the state. The bill would require gas corporations to deliver biomethane or renewable gas from producers to the pipeline system.
(3) Existing law establishes the California Environmental Protection Agency and Agency, establishes the State Air Resources Board within the agency as the entity with responsibility for control of emissions from motor vehicles vehicles, and designates the state board as being the air pollution control agency for all purposes set forth in federal law. The California Global Warming Solutions Act of 2006 establishes the state board as the state agency responsible for charged with monitoring and regulating sources emitting greenhouse gases. of emissions of greenhouse gases that cause global warming.
The Warren-Alquist State Energy Resources Conservation and Development Act establishes the State Energy Resources Conservation and Development Commission (Energy Commission) and requires it to conduct an ongoing assessment of the opportunities and constraints presented by all forms of energy and energy, to encourage the balanced use of all sources of energy to meet the state’s needs and needs, and to seek to avoid possible undesirable consequences of reliance on a single source of energy.
This bill would require the PUC, the Energy Commission, and the state board to incorporate the planning goal and regulatory requirement of achieving 100% reliance on that eligible renewable energy resources or and zero-carbon electric generating facilities to supply all electricity procured to serve California end-use customers no later than December 31, 2045, into all the energy and climate programs subject to their jurisdiction. The bill would require the PUC, the Energy Commission, and the state board those entities to utilize programs authorized under existing statutes to achieve the goal of achieving 100% reliance on eligible renewable energy resources or zero-carbon electric generating facilities to supply all electricity procured to serve California end-use customers no later than December 31, 2045, that planning goal and regulatory requirement and to provide a joint report to the Legislature no later than February 1, 2019, and every 2 years thereafter, that identifies progress and describes remaining barriers to the full realization of these planning goals. that planning goal and regulatory requirement.
(4) Existing law requires the PUC, in cooperation with the Energy Commission, the state board, air quality management districts and air pollution control districts, electrical and gas corporations, and the motor vehicle industry, to evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electric power and natural gas to fuel low-emission vehicles.
This bill would require the PUC, in consultation with the state board and the Energy Commission, to direct gas corporations to file applications to implement programs to facilitate fueling with renewable gas to replace diesel-fueled heavy-duty trucks with near-zero-emission vehicles.
(5) Existing law requires the Office of Environmental Health Hazard Assessment (OEHHA), in consultation with the state board, the Department of Toxic Substances Control, the Department of Resources Recycling and Recovery, and the California Environmental Protection Agency, to compile a list of constituents of concern that could pose risks to human health and that are found in biogas, as defined, at concentrations that significantly exceed the concentrations of those constituents in natural gas. Existing law requires OEHHA to determine the health protective levels for that list, as specified, and requires the state board to identify realistic exposure scenarios and the health risks associated with those scenarios, as specified. Existing law requires the state board to determine the appropriate concentrations of those constituents, as specified. Existing law requires the PUC to adopt, by rule or order, (A) standards for biomethane, as defined, that specify the concentrations of constituents of concern that are reasonably necessary to protect public health and ensure pipeline integrity and safety, as specified, and (B) requirements for monitoring, testing, reporting, and recordkeeping relative to those constituents of concern. Existing law requires a gas corporation to comply with those standards and requirements and requires the PUC to require gas corporation tariffs to condition access to common carrier pipelines on the applicable customer meeting those standards and requirements.
This bill would revise the definition of biogas and biomethane for these purposes, would revise the definition of biomass conversion for certain waste management purposes, and would incorporate these revised definitions into the bill’s provisions.
(6) Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because certain of the provisions of this bill would be a part of the act and because a violation of an order or decision of the PUC implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime. By expanding the requirements placed upon a local publicly owned electric utility, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for specified reasons.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 25420 of the Health and Safety Code is amended to read:

25420.
 For purposes of this chapter, the following definitions apply:
(a) “Biogas” means gas that is produced from the anaerobic decomposition of organic materials or the noncombustion thermal conversion of eligible biomass feedstock consistent with Section 40106 of the Public Resources Code.
(b) “Biomethane” means the methane derived from biogas.
(c) “Board” means the State Air Resources Board.
(d) “CalRecycle” means the Department of Resources Recycling and Recovery.
(e) “Commission” means the Public Utilities Commission.
(f) “Common carrier pipeline” means a gas conveyance pipeline, located in California, that is owned or operated by a utility or gas corporation, excluding a dedicated pipeline.
(g) “Dedicated pipeline” means a conveyance of biogas or biomethane that is not part of a common carrier pipeline system, and which conveys biogas from a biogas producer to a conditioning facility or an electrical generation facility.
(h) “Department” means the Department of Toxic Substances Control.
(i) “Gas corporation” has the same meaning as defined in Section 222 of the Public Utilities Code and is subject to rate regulation by the commission.
(j) “Hazardous waste landfill” means a landfill that is a hazardous waste facility, as defined in Section 25117.1.
(k) “Office” means the Office of Environmental Health Hazard Assessment.
(l) “Person” means an individual, trust, firm, joint stock company, partnership, association, business concern, limited liability company, or corporation. “Person” also includes any city, county, district, and the state or any department or agency thereof, or the federal government or any department or agency thereof to the extent permitted by law.

SEC. 2.

 Section 39730.8 of the Health and Safety Code is amended to read:

39730.8.
 (a) For purposes of this section, the following terms have the following meanings:
(1) “Biogas” and “biomethane” have the same meaning as defined in Section 25420 and, when used to produce electricity, shall satisfy the definition of an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code). Any biomethane delivered to an electrical generating facility or end user through a common carrier or interstate pipeline shall meet the requirements of Section 399.12.6 of the Public Utilities Code.
(2) “Commission” means the Public Utilities Commission.
(3) “Energy commission” Commission” means the State Energy Resources Conservation and Development Commission.
(4) “Gas seller” means a gas corporation, as defined in Section 222 of the Public Utilities Code, or another entity authorized to sell natural gas pursuant to natural gas restructuring (Chapter 2.2 (commencing with Section 328) of Part 1 of Division 1 of the Public Utilities Code), including sales to core and noncore customers pursuant to natural gas restructuring.
(5) “Renewable gas” means biogas, biomethane, or any gas that is produced by a process using electricity from an eligible renewable energy resource, including the renewable fraction of grid electricity, or produced directly using solar energy. For this purpose, “electricity from an eligible renewable energy resource” means electricity that is generated by a facility that qualifies for the procurement requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), irrespective of whether the electricity is delivered to the electrical grid, used onsite, delivered directly, or any combination thereof.
(6) “Strategy” means the strategy to reduce short-lived climate pollutants developed pursuant to Section 39730.
(b) The energy commission, Energy Commission, in consultation with the state board and the commission, shall develop recommendations for the development and use of renewable gas, including biomethane and biogas, as a part of its 2017 Integrated Energy Policy Report prepared pursuant to Section 25302 of the Public Resources Code. In developing the recommendations, the energy commission shall identify cost-effective strategies that are consistent with existing state policies and climate change goals by considering priority end uses of renewable gas, including biomethane and biogas, and their interactions with state policies, including biomethane and all of the following:
(1) The California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(2) The Low-Carbon Fuel Standard regulations (Subarticle 7 (commencing with Section 95480) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations).
(3) Waste diversion goals established pursuant to Division 30 (commencing with Section 40000) of the Public Resources Code.
(4) The market-based compliance mechanism developed pursuant to Part 5 (commencing with Section 38570) of Division 25.5.
(5) The strategy.
(c) Based on the recommendations developed pursuant to subdivision (b), and to meet the state’s climate change, renewable energy, low-carbon fuel, and short-lived climate pollutants goals, including black carbon, landfill diversion, and dairy methane targets identified in the strategy, state agencies shall consider and, as appropriate, adopt policies and incentives to significantly increase the sustainable production and use of renewable gas, including biomethane and biogas.
(d) (1) Based on the recommendations developed pursuant to subdivision (b), the commission, in consultation with the energy commission and the state board, shall consider and, as appropriate, adopt additional policies and incentives to support the development and use in the state of renewable gas, including biomethane and biogas, that reduce short-lived climate pollutants in the state.
(2) The commission may establish a requirement that gas sellers procure a minimum percentage of biomethane or renewable gas from sources that reduce emissions of short-lived climate pollutants in the state. The commission shall require gas corporations to deliver biomethane or renewable gas from the producers to the pipeline system.
(e) In implementing this section, priority shall be given to fuels with the greatest greenhouse gas emissions benefits, including the consideration of carbon intensity and reduction in short-lived climate pollutants, as appropriate.

SEC. 3.

 Section 40106 of the Public Resources Code is amended to read:

40106.
 (a) “Biomass conversion” means the production of heat, fuels, or electricity by the controlled combustion of, or the use of other noncombustion thermal conversion technologies on, the following materials, when separated from other solid waste:
(1) Agricultural crop residues.
(2) Bark, lawn, yard, and garden clippings.
(3) Leaves, silvicultural residue, and tree and brush pruning.
(4) Wood, wood chips, and wood waste.
(5) Nonrecyclable pulp or nonrecyclable paper materials.
(6) The noncombustion thermal conversion of the organic byproducts of anaerobic digestion.
(b) “Biomass conversion” does not include the controlled combustion of recyclable pulp or recyclable paper materials, or materials that contain sewage sludge, industrial sludge, medical waste, hazardous waste, or either high-level or low-level radioactive waste.
(c) For purposes of this section, “nonrecyclable pulp or nonrecyclable paper materials” means either of the following, as determined by the department:
(1) Paper products or fibrous materials that cannot be technically, feasibly, or legally recycled because of the manner in which the product or material has been manufactured, treated, coated, or constructed.
(2) Paper products or fibrous materials that have become soiled or contaminated and as a result cannot be technically, feasibly, or legally recycled.

SEC. 4.

 Section 399.11 of the Public Utilities Code is amended to read:

399.11.
 The Legislature finds and declares all of the following:
(a) In order to attain a target of generating 20 percent of total retail sales of electricity in California from eligible renewable energy resources by December 31, 2013, 33 percent by December 31, 2020, 50 percent by December 31, 2026, 60 percent by December 31, 2030, and 100 percent by December 31, 2045, it is the intent of the Legislature that the commission and the Energy Commission implement the California Renewables Portfolio Standard Program described in this article.
(b) Achieving the renewables portfolio standard through the procurement of various electricity products from eligible renewable energy resources is intended to provide unique benefits to California, including all of the following, each of which independently justifies the program:
(1) Displacing fossil fuel consumption within the state.
(2) Adding new electrical generating facilities in the transmission network within the Western Electricity Coordinating Council service area.
(3) Reducing air pollution, particularly criteria pollutant emissions and toxic air contaminants, in the state.
(4) Meeting the state’s climate change goals by reducing emissions of greenhouse gases associated with electrical generation.
(5) Promoting stable retail rates for electric service.
(6) Meeting the state’s need for a diversified and balanced energy generation portfolio.
(7) Assistance with meeting the state’s resource adequacy requirements.
(8) Contributing to the safe and reliable operation of the electrical grid, including providing predictable electrical supply, voltage support, lower line losses, and congestion relief.
(9) Implementing the state’s transmission and land use planning activities related to development of eligible renewable energy resources.
(c) The California Renewables Portfolio Standard Program is intended to complement the Renewable Energy Resources Program administered by the Energy Commission and established pursuant to Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code.
(d) New and modified electric transmission facilities may be necessary to facilitate the state achieving its renewables portfolio standard targets.
(e) (1) Supplying electricity to California end-use customers that is generated by eligible renewable energy resources is necessary to improve California’s air quality and public health, particularly in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code, and the commission shall ensure rates are just and reasonable, and are not significantly affected by the procurement requirements of this article. This electricity may be generated anywhere in the interconnected grid that includes many states, and areas of both Canada and Mexico.
(2) This article requires generating resources located outside of California that are able to supply that electricity to California end-use customers to be treated identically to generating resources located within the state, without discrimination.
(3) California electrical corporations have already executed, and the commission has approved, power purchase agreements with eligible renewable energy resources located outside of California that will supply electricity to California end-use customers. These resources will fully count toward meeting the renewables portfolio standard procurement requirements.

SEC. 5.

 Section 399.15 of the Public Utilities Code is amended to read:

399.15.
 (a) In order to fulfill unmet long-term resource needs, the commission shall establish a renewables portfolio standard requiring all retail sellers to procure a minimum quantity of electricity products from eligible renewable energy resources as a specified percentage of total kilowatthours sold to their retail end-use customers each compliance period to achieve the targets established under this article. For any retail seller procuring at least 14 percent of retail sales from eligible renewable energy resources in 2010, the deficits associated with any previous renewables portfolio standard shall not be added to any procurement requirement pursuant to this article.
(b) The commission shall implement renewables portfolio standard procurement requirements only as follows:
(1) Each retail seller shall procure a minimum quantity of eligible renewable energy resources for each of the following compliance periods:
(A) January 1, 2011, to December 31, 2013, inclusive.
(B) January 1, 2014, to December 31, 2016, inclusive.
(C) January 1, 2017, to December 31, 2020, inclusive.
(D) January 1, 2021, to December 31, 2023, inclusive.
(E) January 1, 2024, to December 31, 2026, inclusive.
(F) January 1, 2027, to December 31, 2030, inclusive.
(2) (A) No later than January 1, 2017, the commission shall establish the quantity of electricity products from eligible renewable energy resources to be procured by the retail seller for each compliance period. These quantities shall be established in the same manner for all retail sellers and result in the same percentages used to establish compliance period quantities for all retail sellers.
(B) In establishing quantities for the compliance period from January 1, 2011, to December 31, 2013, inclusive, the commission shall require procurement for each retail seller equal to an average of 20 percent of retail sales. For the following compliance periods, the quantities shall reflect reasonable progress in each of the intervening years sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 25 percent of retail sales by December 31, 2016, 33 percent by December 31, 2020, 45 percent by December 31, 2023, 50 percent by December 31, 2026, and 60 percent by December 31, 2030. The commission shall establish appropriate three-year compliance periods for all subsequent years that require retail sellers to procure not less than 60 percent of retail sales of electricity products from eligible renewable energy resources.
(C) Retail sellers shall be obligated to procure no less than the quantities associated with all intervening years by the end of each compliance period. Retail sellers shall not be required to demonstrate a specific quantity of procurement for any individual intervening year.
(3) The commission may require the procurement of eligible renewable energy resources in excess of the quantities specified in paragraph (2).
(4) Only for purposes of establishing the renewables portfolio standard procurement requirements of paragraph (1) and determining the quantities pursuant to paragraph (2), the commission shall include all electricity sold to retail customers by the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code in the calculation of retail sales by an electrical corporation.
(5) The commission shall waive enforcement of this section if it finds that the retail seller has demonstrated any of the following conditions are beyond the control of the retail seller and will prevent compliance:
(A) There is inadequate transmission capacity to allow for sufficient electricity to be delivered from proposed eligible renewable energy resource projects using the current operational protocols of the Independent System Operator. In making its findings relative to the existence of this condition with respect to a retail seller that owns transmission lines, the commission shall consider both of the following:
(i) Whether the retail seller has undertaken, in a timely fashion, reasonable measures under its control and consistent with its obligations under local, state, and federal laws and regulations, to develop and construct new transmission lines or upgrades to existing lines intended to transmit electricity generated by eligible renewable energy resources. In determining the reasonableness of a retail seller’s actions, the commission shall consider the retail seller’s expectations for full-cost recovery for these transmission lines and upgrades.
(ii) Whether the retail seller has taken all reasonable operational measures to maximize cost-effective deliveries of electricity from eligible renewable energy resources in advance of transmission availability.
(B) Permitting, interconnection, or other circumstances that delay procured eligible renewable energy resource projects, or there is an insufficient supply of eligible renewable energy resources available to the retail seller. In making a finding that this condition prevents timely compliance, the commission shall consider whether the retail seller has done all of the following:
(i) Prudently managed portfolio risks, including relying on a sufficient number of viable projects.
(ii) Sought to develop one of the following: its own eligible renewable energy resources, transmission to interconnect to eligible renewable energy resources, or energy storage used to integrate eligible renewable energy resources. This clause shall not require an electrical corporation to pursue development of eligible renewable energy resources pursuant to Section 399.14.
(iii) Procured an appropriate minimum margin of procurement above the minimum procurement level necessary to comply with the renewables portfolio standard to compensate for foreseeable delays or insufficient supply.
(iv) Taken reasonable measures, under the control of the retail seller, to procure cost-effective distributed generation and allowable unbundled renewable energy credits.
(C) Unanticipated curtailment of eligible renewable energy resources if the waiver would not result in an increase in greenhouse gas emissions.
(D) Unanticipated increase in retail sales due to transportation electrification. In making a finding that this condition prevents timely compliance, the commission shall consider all of the following:
(i) Whether transportation electrification significantly exceeded forecasts in that retail seller’s service territory based on the best and most recently available information filed with the State Air Resources Board, the Energy Commission, or other state agency.
(ii) Whether the retail seller has taken reasonable measures to procure sufficient resources to account for unanticipated increases in retail sales due to transportation electrification.
(6) If the commission waives the compliance requirements of this section, the commission shall establish additional reporting requirements on the retail seller to demonstrate that all reasonable actions under the control of the retail seller are taken in each of the intervening years sufficient to satisfy future procurement requirements.
(7) The commission shall not waive enforcement pursuant to this section, unless the retail seller demonstrates that it has taken all reasonable actions under its control, as set forth in paragraph (5), to achieve full compliance.
(8) If a retail seller fails to procure sufficient eligible renewable energy resources to comply with a procurement requirement pursuant to paragraphs (1) and (2) and fails to obtain an order from the commission waiving enforcement pursuant to paragraph (5), the commission shall assess penalties for noncompliance. A schedule of penalties shall be adopted by the commission that shall be comparable for electrical corporations and other retail sellers. For electrical corporations, the cost of any penalties shall not be collected in rates. Any penalties collected under this article shall be deposited into the Electric Program Investment Charge Fund and used for the purposes described in Chapter 8.1 (commencing with Section 25710) of Division 15 of the Public Resources Code.
(9) Deficits associated with the compliance period shall not be added to a future compliance period.
(c) The commission shall establish a limitation for each electrical corporation on the procurement expenditures for all eligible renewable energy resources used to comply with the renewables portfolio standard. This limitation shall be set at a level that prevents disproportionate rate impacts.
(d) If the cost limitation for an electrical corporation is insufficient to support the projected costs of meeting the renewables portfolio standard procurement requirements, the electrical corporation may refrain from entering into new contracts or constructing facilities beyond the quantity that can be procured within the limitation, unless eligible renewable energy resources can be procured without exceeding a de minimis increase in rates, consistent with the long-term procurement plan established for the electrical corporation pursuant to Section 454.5.
(e) (1) The commission shall monitor the status of the cost limitation for each electrical corporation in order to ensure compliance with this article.
(2) If the commission determines that an electrical corporation may exceed its cost limitation prior to achieving the renewables portfolio standard procurement requirements, the commission shall do both of the following within 60 days of making that determination:
(A) Investigate and identify the reasons why the electrical corporation may exceed its annual cost limitation.
(B) Notify the appropriate policy and fiscal committees of the Legislature that the electrical corporation may exceed its cost limitation, and include the reasons why the electrical corporation may exceed its cost limitation.
(f) The establishment of a renewables portfolio standard shall not constitute implementation by the commission of the federal Public Utility Regulatory Policies Act of 1978 (Public Law 95-617).

SEC. 6.

 Section 399.30 of the Public Utilities Code is amended to read:

399.30.
 (a) (1) To fulfill unmet long-term generation resource needs, each local publicly owned electric utility shall adopt and implement a renewable energy resources procurement plan that requires the utility to procure a minimum quantity of electricity products from eligible renewable energy resources, including renewable energy credits, as a specified percentage of total kilowatthours sold to the utility’s retail end-use customers, each compliance period, to achieve the targets of subdivision (c).
(2) Beginning January 1, 2019, a local publicly owned electric utility subject to Section 9621 shall incorporate the renewable energy resources procurement plan required by this section as part of a broader integrated resource plan developed and adopted pursuant to Section 9621.
(b) The governing board shall implement procurement targets for a local publicly owned electric utility that require the utility to procure a minimum quantity of eligible renewable energy resources for each of the following compliance periods:
(1) January 1, 2011, to December 31, 2013, inclusive.
(2) January 1, 2014, to December 31, 2016, inclusive.
(3) January 1, 2017, to December 31, 2020, inclusive.
(4) January 1, 2021, to December 31, 2023, inclusive.
(5) January 1, 2024, to December 31, 2026, inclusive.
(6) January 1, 2027, to December 31, 2030, inclusive.
(c) The governing board of a local publicly owned electric utility shall ensure all of the following:
(1) The quantities of eligible renewable energy resources to be procured for the compliance period from January 1, 2011, to December 31, 2013, inclusive, are equal to an average of 20 percent of retail sales.
(2) The quantities of eligible renewable energy resources to be procured for all other compliance periods reflect reasonable progress in each of the intervening years sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 25 percent of retail sales by December 31, 2016, 33 percent by December 31, 2020, 45 percent by December 31, 2023, 50 percent by December 31, 2026, and 60 percent by December 31, 2030. The Energy Commission shall establish appropriate multiyear compliance periods for all subsequent years that require the local publicly owned electric utility to procure not less than 60 percent of retail sales of electricity products from eligible renewable energy resources.
(3) A local publicly owned electric utility shall adopt procurement requirements consistent with Section 399.16.
(4) Beginning January 1, 2014, in calculating the procurement requirements under this article, a local publicly owned electric utility may exclude from its total retail sales the kilowatthours generated by an eligible renewable energy resource that is credited to a participating customer pursuant to a voluntary green pricing or shared renewable generation program. Any exclusion shall be limited to electricity products that do not meet the portfolio content criteria set forth in paragraph (2) or (3) of subdivision (b) of Section 399.16. Any renewable energy credits associated with electricity credited to a participating customer shall not be used for compliance with procurement requirements under this article, shall be retired on behalf of the participating customer, and shall not be further sold, transferred, or otherwise monetized for any purpose. To the extent possible for generation that is excluded from retail sales under this subdivision, a local publicly owned electric utility shall seek to procure those eligible renewable energy resources that are located in reasonable proximity to program participants.
(d) (1) The governing board of a local publicly owned electric utility shall adopt procurement requirements consistent with subparagraph (B) of paragraph (4) of subdivision (a) of, and subdivision (b) of, Section 399.13.
(2) The governing board of a local publicly owned electric utility may adopt the following measures:
(A) Conditions that allow for delaying timely compliance consistent with subdivision (b) of Section 399.15.
(B) Cost limitations for procurement expenditures consistent with subdivision (c) of Section 399.15.
(e) The governing board of the local publicly owned electric utility shall adopt a program for the enforcement of this article. The program shall be adopted at a publicly noticed meeting offering all interested parties an opportunity to comment. Not less than 30 days’ notice shall be given to the public of any meeting held for purposes of adopting the program. Not less than 10 days’ notice shall be given to the public before any meeting is held to make a substantive change to the program.
(f) Each local publicly owned electric utility shall annually post notice, in accordance with Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code, whenever its governing body will deliberate in public on its renewable energy resources procurement plan.
(g) A public utility district that receives all of its electricity pursuant to a preference right adopted and authorized by the United States Congress pursuant to Section 4 of the Trinity River Division Act of August 12, 1955 (Public Law 84-386) shall be in compliance with the renewable energy procurement requirements of this article.
(h) For a local publicly owned electric utility that was in existence on or before January 1, 2009, that provides retail electric service to 15,000 or fewer customer accounts in California, and is interconnected to a balancing authority located outside this state but within the WECC, an eligible renewable energy resource includes a facility that is located outside California that is connected to the WECC transmission system, if all of the following conditions are met:
(1) The electricity generated by the facility is procured by the local publicly owned electric utility, is delivered to the balancing authority area in which the local publicly owned electric utility is located, and is not used to fulfill renewable energy procurement requirements of other states.
(2) The local publicly owned electric utility participates in, and complies with, the accounting system administered by the Energy Commission pursuant to this article.
(3) The Energy Commission verifies that the electricity generated by the facility is eligible to meet the renewables portfolio standard procurement requirements.
(i) Notwithstanding subdivision (a), for a local publicly owned electric utility that is a joint powers authority of districts established pursuant to state law on or before January 1, 2005, that furnish electric services other than to residential customers, and is formed pursuant to the Irrigation District Law (Division 11 (commencing with Section 20500) of the Water Code), the percentage of total kilowatthours sold to the district’s retail end-use customers, upon which the renewables portfolio standard procurement requirements in subdivision (b) are calculated, shall be based on the authority’s average retail sales over the previous seven years. If the authority has not furnished electric service for seven years, then the calculation shall be based on average retail sales over the number of completed years during which the authority has provided electric service.
(j) A local publicly owned electric utility in a city and county that only receives greater than 67 percent of its electricity sources from hydroelectric generation located within the state that it owns and operates, and that does not meet the definition of a “renewable electrical generation facility” pursuant to Section 25741 of the Public Resources Code, shall be required to procure eligible renewable energy resources, including renewable energy credits, to meet only the electricity demands unsatisfied by its hydroelectric generation in any given year, in order to satisfy its renewable energy procurement requirements.
(k) (1) For the purposes of this subdivision, “hydroelectric generation” means electricity generated from a hydroelectric facility that satisfies all of the following:
(A) Is owned solely and operated by the local publicly owned electric utility as of 1967.
(B) Serves a local publicly owned electric utility with a distribution system demand of less than 150 megawatts.
(C) Involves a contract in which an electrical corporation receives the benefit of the electric generation through June of 2014, at which time the benefit reverts back to the ownership and control of the local publicly owned electric utility.
(D) Has a maximum penstock flow capacity of no more than 3,200 cubic feet per second and includes a regulating reservoir with a small hydroelectric generation facility producing fewer than 20 megawatts with a maximum penstock flow capacity of no more than 3,000 cubic feet per second.
(2) If, during a year within a compliance period set forth in subdivision (b), a local publicly owned electric utility receives greater than 50 percent of its retail sales from its own hydroelectric generation, it is not required to procure eligible renewable energy resources that exceed the lesser of the following for that year:
(A) The portion of the local publicly owned electric utility’s retail sales unsatisfied by the local publicly owned electric utility’s hydroelectric generation. For these purposes, retail sales supplied by an increase in hydroelectric generation resulting from an increase in the amount of water stored by a dam because the dam is enlarged or otherwise modified after December 31, 2012, shall not count as being retail sales supplied by the utility’s own hydroelectric generation.
(B) The soft target adopted by the Energy Commission for the intervening years of the relevant compliance period.
(C) The cost limitation adopted pursuant to this section.
(3) This subdivision does not reduce or eliminate any renewable procurement requirement for any compliance period ending prior to January 1, 2014.
(4) This subdivision does not require a local publicly owned electric utility to purchase additional eligible renewable energy resources in excess of the procurement requirements of subdivision (c).
(5) The Energy Commission shall adjust the total quantities of eligible renewable energy resources to be procured by a local publicly owned electric utility for a compliance period to reflect any reductions required pursuant to paragraph (2).
(l) (1) For purposes of this subdivision, “large hydroelectric generation” means electricity generated from a hydroelectric facility that is not an eligible renewable energy resource and provides electricity to a local publicly owned electric utility from facilities owned by the federal government as a part of the federal Central Valley Project or a joint powers agency formed and created pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code.
(2) If, during a year within a compliance period set forth in subdivision (b), a local publicly owned electric utility receives greater than 50 percent of its retail sales from large hydroelectric generation, it is not required to procure eligible renewable energy resources that exceed the lesser of the following for that year:
(A) The portion of the local publicly owned electric utility’s retail sales unsatisfied by the local publicly owned electric utility’s large hydroelectric generation.
(B) The soft target adopted by the Energy Commission for the intervening years of the relevant compliance period.
(3) Except for an existing agreement effective as of January 1, 2015, or extension or renewal of that agreement, any new procurement commitment shall not be eligible to count towards the determination that the local publicly owned electric utility receives more than 50 percent of its retail sales from large hydroelectric generation in any year.
(4) The Energy Commission shall adjust the total quantities of eligible renewable energy resources to be procured by a local publicly owned electric utility for a compliance period to reflect any reductions required pursuant to paragraph (2).
(5) This subdivision does not modify the compliance obligation of a local publicly owned electric utility to satisfy the requirements of subdivision (c) of Section 399.16.
(m) (1) (A) For purposes of this subdivision, “unavoidable long-term contracts and ownership agreements” means commitments for electricity from a coal-fired powerplant, located outside the state, originally entered into by a local publicly owned electric utility before June 1, 2010, that is not subsequently modified to result in an extension of the duration of the agreement or result in an increase in total quantities of energy delivered during any compliance period set forth in subdivision (b).
(B) The governing board of a local publicly owned electric utility shall demonstrate in its renewable energy resources procurement plan required pursuant to subdivision (f) that any cancellation or divestment of the commitment would result in significant economic harm to its retail customers that cannot be substantially mitigated through resale, transfer to another entity, early closure of the facility, or other feasible measures.
(2) For the compliance period set forth in paragraph (4) of subdivision (b), a local publicly owned electric utility meeting the requirement of subparagraph (B) of paragraph (1) may adjust its renewable energy procurement targets to ensure that the procurement of additional electricity from eligible renewable energy resources, in combination with the procurement of electricity from unavoidable long-term contracts and ownership agreements, does not exceed the total retail sales of the local publicly owned electric utility during that compliance period. The local publicly owned electric utility may limit its procurement of eligible renewable energy resources for that compliance period to no less than an average of 33 percent of its retail sales.
(3) The Energy Commission shall approve any reductions in procurement targets proposed by a local publicly owned electric utility if it determines that the requirements of this subdivision are satisfied.
(n) A local publicly owned electric utility shall retain discretion over both of the following:
(1) The mix of eligible renewable energy resources procured by the utility and those additional generation resources procured by the utility for purposes of ensuring resource adequacy and reliability.
(2) The reasonable costs incurred by the utility for eligible renewable energy resources owned by the utility.
(o) The Energy Commission shall adopt regulations specifying procedures for enforcement of this article. The regulations shall include a public process under which the Energy Commission may issue a notice of violation and correction against a local publicly owned electric utility for failure to comply with this article, and for referral of violations to the State Air Resources Board for penalties pursuant to subdivision (n).
(p) (1) Upon a determination by the Energy Commission that a local publicly owned electric utility has failed to comply with this article, the Energy Commission shall refer the failure to comply with this article to the State Air Resources Board, which may impose penalties to enforce this article consistent with Part 6 (commencing with Section 38580) of Division 25.5 of the Health and Safety Code. Any penalties imposed shall be comparable to those adopted by the commission for noncompliance by retail sellers.
(2) Any penalties collected by the State Air Resources Board pursuant to this article shall be deposited in the Air Pollution Control Fund and, upon appropriation by the Legislature, shall be expended for reducing emissions of air pollution or greenhouse gases within the same geographic area as the local publicly owned electric utility.

SEC. 7.

 Section 454.53 is added to the Public Utilities Code, to read:

454.53.
 (a) For all energy and climate programs subject to their jurisdiction, the commission, the Energy Commission, and the State Air Resources Board shall incorporate the planning goal and regulatory requirement of achieving 100 percent reliance on that eligible renewable energy resources or and zero-carbon electric generating facilities to supply all electricity procured to serve California end-use customers no later than December 31, 2045.
(b) In developing and implementing the planning goals goal and regulatory requirement required by subdivision (a), each commission and the state board shall do all of the following:
(1) Emphasize the need for new and incremental zero-carbon resources that displace fossil fuel usage within California.
(2) Exclude any generation from existing zero-carbon resources not serving California customers as of January 1, 2018, from satisfying these goals. that goal and regulatory requirement.
(3) Transition fossil fuel generating resources within the state to zero-carbon fuels.
(c) Each commission and the state board shall utilize programs authorized under existing statutes to achieve the goals goal and regulatory requirement described in subdivision (a) and shall provide a joint report to the Legislature no later than February 1, 2019, and every two years thereafter, that identifies progress and describes remaining barriers to the full realization of these planning goals. that planning goal and regulatory requirement.

SEC. 8.

 Section 740.15 is added to the Public Utilities Code, to read:

740.15.
 (a) The Legislature finds and declares all of the following:
(1) Diesel exhaust from heavy-duty trucks is a major source of criteria, toxic, and carcinogenic pollutants.
(2) Low-income communities suffer disproportionate impacts from heavy-duty trucks in industrial and port areas, and near freeways.
(3) The South Coast Air Quality Management District recently adopted its 2016 Air Quality Management Plan. That plan relies on near-zero-emission engine technologies that use natural gas as fuel in heavy-duty vehicles.
(4) Zero-emission vehicles are not available for all uses.
(5) Where zero-emission vehicle types are not commercially available, replacing diesel-fueled trucks with near-zero-emission vehicles fueled with renewable gas will reduce the impacts from diesel exhaust.
(b) For purposes of this section, the following terms have the following meaning:
(1) “Near-zero-emission vehicle” means a heavy-duty vehicle with emissions of oxides of nitrogen that are no greater than ____. an amount determined by the State Air Resources Board.
(2) “Renewable gas” has the same meaning as defined in Section 39730.8 of the Health and Safety Code.
(c) The commission, in consultation with the State Air Resources Board and the Energy Commission, shall may direct gas corporations to file applications to implement programs to facilitate fueling to replace diesel-fueled heavy-duty trucks with near-zero-emission vehicles. The commission If the commission acts pursuant to this authorization, it shall approve or modify and approve programs consistent with all of the following:
(1) Fueling shall only be for vehicle types where zero-emission vehicles are not available. commercially available, as determined by the State Air Resources Board.
(2) Fueling shall be with renewable gas.
(3) The programs shall be coordinated with other agencies and private programs to replace diesel vehicles.
(4) The programs shall seek to minimize overall costs and maximize overall benefits. benefits to ratepayers by ensuring the cost allocation principles are adhered to pursuant to Section 739.6.
(d) In implementing this section, the commission shall ensure it gives thoughtful consideration to the proper role of a regulated utility, the effects of a regulated utility’s interactions with the market and with nonregulated entities, and the best interests of ratepayers, while also ensuring its thoughtful consideration of the benefits of cleaner air to society.

SEC. 9.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.